In today’s briefing:
- Toyota Industries (6201 JP): Evaluating Elliott’s Letter
- StubWorld: WuXi Biologics (2269 HK)’s Double Discounts; Melco (200 HK) Further Out Of Whack
- Worthington Steel – Kloeckner: €11 Cash Offer Secured — Execution, Not Price, Now the Only Variable
- Dongwon Group: Getting Ready to Bid for Controlling Stake in HMM + New Arctic/Greenland Sea Routes?
- Weekly Update (VSNT, LHX, FDX)
- Liquid Universe of European Ordinary and Preferred Shares: January ’26 Report
- Investment Pitches and Updates: ANGI Turnaround, ROK Merger Risks, and Activist Actions
Toyota Industries (6201 JP): Evaluating Elliott’s Letter
- Elliott has released a letter urging shareholders to reject Toyota Fudosan’s JPY18,800 offer for Toyota Industries (6201 JP).
- Elliott’s letter makes both sensible (the offer is below 3Q book value, with limited downside risk on a deal break) and outlandish (the standalone plan is worth JPY40,000) assertions.
- There is a good chance of a further bump (to JPY21,000), as an offer below the 3Q book value (disclosed on 3 February) will give Elliott’s campaign a huge boost.
StubWorld: WuXi Biologics (2269 HK)’s Double Discounts; Melco (200 HK) Further Out Of Whack
- WuXi XDC Cayman (2268 HK)‘s Offer for BioDlink International (1875 HK) will add an additional discount layer to WuXi Biologics (2269 HK).
- Preceding my comments on WuXi stable – and Melco International Development (200 HK) – are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Worthington Steel – Kloeckner: €11 Cash Offer Secured — Execution, Not Price, Now the Only Variable
- Firm €11.00 cash offer with irrevocable 41.53% tender and board support removes execution risk; pricing exceeds standalone value and prior anchors, reflecting meaningful synergy sharing and control certainty overall confidence.
- Dividend-Adjusted consideration of €11.20 implies ~1.5% gross spread and ~95–98% completion probability; remaining upside compensates timing and regulatory clearance, shifting the trade toward low-volatility carry through settlement in H2 2026.
- Assuming September 2026 settlement, annualised return approximates 2.2%; interloper risk appears limited, minimum acceptance readily achievable, and residual risks centre on regulatory timing, dividend mechanics, and financing market stability conditions.
Dongwon Group: Getting Ready to Bid for Controlling Stake in HMM + New Arctic/Greenland Sea Routes?
- There are credible signs that the Dongwon Group is getting ready to bid for a controlling stake in HMM (011200 KS).
- If the StarKist sale is completed, Dongwon Industries could gain an additional 2 trillion won in cash.
- The increasing commercial feasibility of conducting container shipping through the new North Sea Arctic and Greenland seas could provide new long-term revenues/lower costs for HMM (011200 KS).
Weekly Update (VSNT, LHX, FDX)
- On January 13, 2026, L3Harris (LHX) announced that it is planning to spin off its Missile Solutions business (the unit that makes solid rocket motors and other missile propulsion systems) into a stand-alone, publicly traded company in the second half of 2026.
- This will be done through an initial public offering (IPO).
- The most interesting aspect of this news is that the U.S. Department of Defense (DoD) will invest $1BN in convertible equity which will become common equity once the division goes public.
Liquid Universe of European Ordinary and Preferred Shares: January ’26 Report
- January saw post year-end normalisation, with selective convergence resuming while the median voting premium remained stable, confirming no systemic repricing of control across Europe’s dual-class universe.
- Liquidity and structure drove outcomes, with convergence working in scalable, index-exposed pairs, while a small number of structurally constrained names continued to dominate dispersion.
- Opportunities remain selective into 2026, favouring liquidity-driven convergence and balance-sheet normalisation, while extreme Nordic dislocations persist as high-dispersion, structurally constrained trades.
Investment Pitches and Updates: ANGI Turnaround, ROK Merger Risks, and Activist Actions
- Angi is in a turnaround phase with potential profitability inflection by mid-year, trading at 6x EBITDA and 12x FCF.
- STAAR Surgical reached a settlement with activists, resulting in board reconstitution and management changes, with Q4 results pending.
- Thunderbird Entertainment faces activist opposition to its merger, requiring two-thirds approval, with a 15% spread on cash consideration.
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